(technical replay)

LUXEMBOURG (dpa-AFX) - The dispute between ailing real estate group Adler Group and some creditors is coming to a head. Presenting a restructuring plan to the court in London, the company's lawyer stressed that a decision on the plan was urgent by April 13. Insolvency and a distress sale of properties would result in an estimated only 57 percent of the debt being repaid. Creditors include Deutsche Bank subsidiary DWS as well as some investment companies.

Adler had already announced on Thursday evening that two creditors had called bonds with a total nominal amount of just under 193 million euros. In the course of the move, they could now try to have a declaration of insolvency made and thus accelerate an early repayment. Adler considers the bond termination to be invalid and reserves the right to take legal action.

There has been criticism of Adler's restructuring plans for some time. For example, at the end of 2022, some creditors had refused to give the company their consent to new conditions for a specific bond series. Adler was therefore unable to implement the original plan for all bonds. Instead, the group is pursuing an "English restructuring plan." The documents for this were filed in London this Friday.

Adler has been negotiating with its creditors for months. The company initially came under the scrutiny of Germany's Federal Financial Supervisory Authority (Bafin) in October 2021 following allegations by short-seller Fraser Perring, and is now also under pressure in the face of rising interest rates and a high financing requirement. To this end, the company had thinned out its portfolio and sold properties in order to reduce its debt and keep financing conditions in the solid range.

Changing the bond terms is also part of the reorganization plan. In November, the real estate company had already reached an agreement on this with important creditors such as Allianz subsidiary Pimco and U.S. investment company Blackrock, and had also received a commitment for new debt capital of almost one billion euros.

However, Adler's goal of extending the maturities of the bonds, among other things, met with resistance from some investors. As a result, it failed to obtain the support of three-quarters of creditors required under German law. The plan aroused displeasure above all among those investors who own the corporate bonds with the longest maturities. These are currently trading significantly cheaper on the bond market than, for example, the securities maturing in 2023 and next year.

However, according to Adler disclosures in mid-January, at the time 78 percent of bondholders had come out in support of the restructuring under English law. As part of the agreement, they are also to waive an audited annual financial statement until next year. This is because Adler still lacks a corresponding auditor. The auditing company KPMG had refused to be appointed by a Berlin court for the 2022 financial year.

KPMG had already refused Adler the audit certificate for 2021 - the Group had then published the figures without an audit certificate in the spring of last year in order, according to its own statements, to fulfill the reporting obligations in accordance with the terms of outstanding bonds. In 2021, the company had accumulated a bottom-line loss of almost 1.2 billion euros.

Once again, the news did not go down well on the stock market. The share price recently fell by almost one percent to 1.02 euros, approaching the record low of one euro reached only on Wednesday. In the past twelve months, the company's stock market value has plummeted by more than 90 percent to just 120 million euros./mis/tav/zb/he